Aramco told EGPC it was cutting supplies, no reason given -official
THE OIL MINISTRY HAS CONFIRMED THAT SAUDI ARAMCO has halted October’s shipments of petroleum products to Egypt, but has not called-off a USD 23 bn, five-year supply agreement, said Oil Ministry spokesperson Hamdy Abdel Aziz in a statement on Monday. Aramco hasn’t given a reason behind the move, said Abdel Aziz adding this does not mean Aramco is backing out of the agreement, which would see it deliver 700k tonnes of petroleum products monthly on a line of credit. An Aramco official denied yesterday the company had suspended shipments, saying the company has an obligation to fulfill its contract with the Egyptian General Petroleum Corporation, according to Saudi news outlet Al Mnatiq. Also yesterday, Reuters quoted an unnamed government official as saying Aramco had abruptly informed the EGPC verbally it would halt the supply of refined oil products to Egypt without citing a reason or a timeline.
The cabinet is already exploring alternatives to meet demand, including increasing tenders, an unnamed government official tells Al Masry Al Youm, something traders had confirmed over the weekend. EGPC has already issued a tender to import up to 105k tonnes of 95-octane fuel for November delivery in Suez, Reuters reported. The tender, which specifically calls for delivery from 1-3 November, 9-11 November, and 21-23 November, closes on 12 October. The newswire says EGPC has already issued a separate tender to import up to 132k tonnes of gasoline for November delivery in Alexandria.
Shipment delays come amid diplomatic rows: The hiatus in shipments comes amid an uncharacteristic public spat between Egypt and Saudi, widely picked up in both the domestic and foreign press. The Saudi envoy to the United Nations, Abdullah al Muallami, had rebuked Egypt on Sunday after it voted for a Russia-backed resolution on Syria besides the Saudi-backed French one. Mada Masr, which is quoting an official from Aramco, is claiming that the decision to stall shipments was politically motivated. Linking both incidents may be a stretch at this point: The shipments have been delayed since 1 October, long before the vote, though lobbying and an indication of where the vote would land may have taken place beforehand.